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have access to WISH funds by being a member of the FHLBank. Obtaining the WISH funds is also difficult as the funds typically run out quickly. The maximum $15,000 WISH funds, similar to the City's current maximum DPA loan amount of$20,000, is not sufficient to have an impact on affordability for homebuyers. The U.S. Department of Veterans Affairs (VA) offers veterans and service members VA- backed purchase loans that do not require any down payment. The U.S. Department of Agriculture (USDA) also offers home purchase loans without down payment and closing costs requirements. However, these federally-backed loans, which do not have specific income requirements, do not make the mortgage payments more affordable; instead, they just remove the saving of the 3 — 5% down payment requirement, which is often a barrier of entry for hopeful first time homebuyers. Home loan borrowers may be qualified to provide no down payment but this results in a higher monthly payment; thus, making homes more unaffordable. The restructured DPA program with its recommended $100,000 deferred loan, mirroring the County's AC Boost Program, will reduce a homebuyer's first mortgage debt service by $100,000 to make the monthly payments more affordable. AC Boost, meanwhile, is currently available for Pleasanton residents. Though, as described in the purchasing power in Table 1, an AC Boost only-assisted homeowner has approximately $74,000 less purchasing power ($539,580 vs. $613,639) and a higher monthly mortgage payment compared to a potential Pleasanton homebuyer who is able to secure both an AC Boost loan and a Pleasanton DPA loan. HOUSING COMMISSION RECOMMENDATION The Housing Commission discussed this issue at its meetings on May 16, 2019, and on August 22, 2019. Please refer to the attached excerpt of the minutes from these meetings. The Commission supported the proposed modifications to increase the maximum loan amount, restructure the loan terms, and adopt a "shared appreciation loan" policy. RECOMMENDATION Staff concurs with the Housing Commission's recommendations and recommends that the City Council review and approve the proposed modifications to the City's Down Payment Assistance Program. Staff also recommends that Council direct staff to include $100,000 to $300,000 in the FY 2020/21 midterm budget to be used to fund this program. Alternative Policy Choice The City Council could consider a program serving only low income (80% AMI) buyers. The City's DPA program was launched in 2003 to assist both low income (80% AMI) and moderate income (120%) first time homebuyers. While there may be a desire to restructure the City's DPA loan program to assist only households earning less than 80% AMI, City staff does not believe such a policy choice will prove to be effective. Page 8 of 9